SoFi Technologies Stock Forecast: SOFI shares charge higher off recent all-time lows

Shares of SoFi Technologies (SOFI) opened flat on Wednesday but then rushed up 5% to $8.61 alongside the rest of the US market. The Nasdaq is up 3% at the same time. Markets are buoyed on Wednesday due to the Federal Reserve meeting in Washington, DC, which is expected to see the fed funds rate pushed up by 25 basis points. Additionally, oil and other commodity prices have been falling due to positive statements by both Russian and Ukrainian diplomats at peace talks.

SoFi Technologies Stock News: Still growing with the acquisitions

SoFi completed its acquisition of Technysis on March 3. This company created a digital platform for banks that SoFi says will allow them to serve other banks as well as save as much as $70 million a year eventually. Management predicts the acquisition will add between $500 million and $800 million in revenue through 2025.

In a recent filing, SoFi said: "While we primarily operate in the United States, we expanded into Hong Kong with our acquisition of 8 Limited (an investment business), we gained clients in Mexico and Colombia with our acquisition of Galileo, and we further expanded into Latin America with our acquisition of Technisys." Only in February did SoFi complete its acquisition of Golden Pacific Bank, which renders it a bank holding company. One would think as a bank that SOFI would stop feeling the brunt of the anti-growth stock nature of the current investing environment. Most banks make profits, however, and SoFi's management team does not seem to think that profits are a priority in the near future.

SoFi continues to turn off some investors with its exorbitant stock-based compensation packages. In fiscal 2021, for instance, stock-based compensation for its executives amounted to $240 million, which amounts to about one-quarter of revenue. According to company documents, stock compensation could jump by more than 40% in 2022. This type of compensation makes it harder for the company to turn a profit when the market has begun demanding all growth stocks do so. SoFi stock is down by nearly 48% year to date.

RiverPark Large Growth mutual fund struck a positive note in its recent Q4 investor letter. "We expect the company to grow revenue by more than 30% annually for the next several years and grow its margin by cross-selling more profitable products—with low or no customer acquisition costs—and increasing scale, leading to profit growth of more than 50% annually for the foreseeable future."

The Baron FinTech Fund struck a more sour note in their Q4 letter: "We sold our position in SoFi Technologies after a strong run due to concerns about intensifying competition and rising customer acquisition costs."

CEO Anthony Noto purchased nearly $300,000 worth of stock during the first week of March.

SOFI key statistics

SOFI Stock Forecast: Needs to get back above the $10 threshold

Wednesday's run-up for SoFi stock is good for shareholders, but it still has ways to run before it can return to a bullish trajectory. Simply put, SOFI is trading below the $10 threshold where its SPAC raised the investment that it would later use to merge with SoFi. Anytime a SPAC stock trades below $10, it is a bad sign. Only two days ago, SOFI shares reached their all-time low.

Here in the daily chart, support comes from earlier this week at $7.80. SOFI needs to rise more than 15% to get back above the $10 threshold. Above $10 it is neutral. There is a small ledge at $12 that goes back to the early days after its IPO, but it is not certain that $12 will act as resistance. The more important target is $13.14, which acted as support on March 5, 2021, and then as resistance in January and February of this year. Above here, SOFI will return to a more bullish footing. Conquering $16 will open a new chapter and bring renewed confidence back to the stock.

SOFI daily chart